Legal analysis of the 2006 Unlawful IG Act

[joel2006]

This dude is a law professor who specializes in the area of internet gambling. It includes goodies like " This does not completely solve the problem of Internet poker, or even Internet casinos. The Act does not expand the reach of the Wire Act, the main federal statute the DOJ uses against Internet gambling. Although the DOJ has taken the position that the Wire Act covers all forms of gambling, courts have ruled that it is limited to bets on sports events and races. State anti-gambling statutes have similar weaknesses, including the presumption that they do not apply if part of the activity takes place overseas. This new statute requires that the Internet gambling be “unlawful.” But it would often be difficult to find a federal, state or tribal law that clearly made a specific Internet bet illegal."

Linky

[joel2006]

Additional useful information is that cashing out by paper check (fron Neteller or the site itself) will still be a safe option, he writes;

" The Act allows the federal regulators to exempt transactions where it would be impractical to require identifying and blocking. This obviously applies to paper checks. Banks have no way now of reading who the payee is on paper checks and cannot be expected to go into that business. Banks tried to defeat this bill, not because they cared about patrons’ privacy, but because they knew that it would cost them billions of dollars to set up systems to read paper checks."

And later;

"It is extremely doubtful whether the F.T.C. will ever try to do anything about the Netellers of the world, who are beyond regular U.S. regulatory control.
§5365 Since there is no way to regulate overseas payment processors, the Act allows the U.S. and state attorneys general to bring civil actions in federal court. The courts have the power to issue temporary restraining orders, preliminary and permanent injunctions, to prevent restricted transactions. The only problem with this enormous power is that it is, again, practically useless against payment processors who are entirely overseas.
It is difficult to serve a company with the papers necessary to start a lawsuit, a summons and complaint or petition, if the company has no offices, or officers, in the U.S. Even if the papers for such a lawsuit can be served, there is normally no requirement that foreign countries enforce these types of orders. Other countries are particularly reluctant to enforce a T.R.O., which does not even require that the defendant be present. Preliminary injunctions are also often ignored, because they are issued without a full trial and can be modified at anytime by the trial judge. Neteller operates out of the Isle of Man. I do not know of any treaty or other law which would require the Isle of Man to enforce even a permanent injunction against one of its licensed operators."

There is some bad news for affiliates, it would seem;
"The greatest danger here would seem to be with affiliates. Any American operator can be easily grabbed. This includes sites that don’t directly take bets, but do refer visitors to gaming sites. If the affiliate is paid for those referrals by receiving a share of the money wagered or lost, it would not be difficult to charge the affiliate with violating this law, under the theory of aiding and abetting. Being a knowing accomplice and sharing in the proceeds of a crime make the aider and abettor guilty of the crime itself. The federal government could also charge the affiliate with conspiracy to violate this new Act."

The Cliff notes version of his analysis is that the UIGA of 2006 is unenforceable and mainly a political stunt to keep the conservative base happy before the upcoming election.

[memphis57]

Good info, thanks.

[MicroBob]

I. Nelson Rose is already a pretty famous internet-gambling analyst.
This article had already been listed in the legislation forum in the sticky.

I agree with many of his observations. Rose definitely knows his stuff imo.

[scrapperdog]

I would rather hear it from a banking professor or someone that actually knows for sure it is going to be that hard for them to track checks.

[benfranklin]

[ QUOTE ]
I would rather hear it from a banking professor or someone that actually knows for sure it is going to be that hard for them to track checks.

[/ QUOTE ]

They don't know what the rules are yet. The law gives the Dept. of the Treasury up to 270 days to write the banking rules.